Legislative Update

Procedural vote on bipartisan infrastructure package fails, plan still in play
 
Last Wednesday’s procedural vote on the $1.2 trillion bipartisan infrastructure package failed 51-to-49.  60 votes were needed for passage.  The outcome was a foregone conclusion as Senate Republicans had indicated that they would not vote to begin debate until the package was finalized. The removal of a provision appropriating $40 billion for increased IRS enforcement, which was projected to yield $100 billion in additional tax revenue, necessitated the development of an alternative as the agreement is predicated on the understanding that its cost will not increase the deficit. 
 
Senate Majority Leader Chuck Schumer (D-New York) proceeded with the vote arguing that the package did not need to be finalized to begin debate. The failure of Wednesday’s vote is not a major setback as Senate Majority Leader Chuck Schumer (D-New York) can call another vote once the details of the package are finalized (for parliamentary reasons, he changed his vote from “yes” to “no” – a move that will allow him to bring the measure up again).  
 
As of this writing, negotiations continue. 
 
Debt ceiling fight developing
 
Senate Republicans have indicated that they may not vote to increase the debt ceiling (the statutory limit on federal borrowing) unless Democrats agree to rein-in spending.   The current agreement to suspend the debt ceiling expires on July 31 following its suspension for two years in 2019.  The prior debt ceiling was $22 trillion; however, during the suspension, an additional $6.5 trillion was borrowed bringing the total amount of debt subject to the limit to $28.5 trillion.  A substantial portion of that borrowing was in response to the COVID pandemic.  Should Congress not increase the debt limit by the deadline, the Treasury Department would invoke “extraordinary measures” to prevent default over the summer.  However, the prospect of default looms at some point in the fall. Democratic leadership and the Biden Administration have not publicly indicated a willingness to negotiate yet.  
 
This comes amid Democratic efforts to advance a $3.5 trillion budget resolution via the reconciliation process[i] which would fund an array of social spending and climate action measures that the Biden Administration seeks to undertake.